The Importance of Investing for Retirement

For many busy working-class people, saving money and thinking about setting up a retirement plan is the last thing that they want to consider. They're pulling in a decent paycheck, spending it on bills and a few pleasurable activities, and because they're young and energetic, they're confident that this status quo will continue for as long as necessary.

Eventually, however, they begin to come to their senses – perhaps because of maturity, perhaps by embryonic thoughts of their own mortality – and the realization that nothing lasts forever, and that all things change. At this time, investing a portion of their salary toward their future wellbeing becomes a top priority. Well, as the old saying goes, better late than never.

Unfortunately, most of these people willingly hand over the critical element of retirement planning to someone else – whether it's the government through Social Security, their company's pension plan, a 401(k) or a similar arrangement administered by some financial 'expert'. But the lessons of history (especially recent history) clearly show that many of those retirement vehicles administered by so-called experts come with serious caveats. The Enron and WorldCom meltdowns continue to speak volumes for the security (or lack thereof) of any company pension plan. And as for Social Security, (when you're ready for it), the best that you'll be able to reasonably expect is that it will provide you with a modest supplement; at worst it will be nothing more than a few weeks of grocery money.

The point here is this: unless you were born with a silver spoon in your mouth, you absolutely need to begin investing to protect yourself and your family in your retirement years. Statistics show that for roughly ninety-five percent of all retirees, there are no golf club memberships or exciting vacations to exotic places that you always dreamed of seeing. They'd like to help their children buy their first home, but the truth is that they've had to tighten the belt dramatically to keep their own. They'd love to start a fund for their grandkids' college education, but they just don't have it to spare, ever. It should not be that way.

Think about this simple illustration: many people would agree that the most successful investment they ever made was the purchase of their home. Over the years of ownership they witnessed their equity position in their property continue to grow and grow. They didn't need to do anything special for it to happen; they only had to stay invested for the long term. For these same people, however, they never truly understood what they were not only seeing, but living. They never equated the underlying principle of this profitable real estate investment with the rest of their investment portfolio (if they even had one). The proof was before their very eyes: long-term investing for retirement works very well, and it needn't be ultra-risky to provide good returns.

If you haven't begun investing for your future, what are you waiting for? Every day that passes is time that you can't get back; and when investing over the long haul, time is your greatest ally. Educate yourself, develop a plan and implement it not only for yourself, but also for your family's future financial security.

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